£500 million in savings to ease ‘enormous’ pressure on public finances
Holyrood’s Finance Secretary Shona Robison has outlined the urgent action being taken to balance the 2024-25 Scottish Budget in the face of “enormous and growing pressure on the public finances”.
Highlighting the continuing effects of Brexit, the COVID-19 pandemic, the war in Ukraine and the cost of living crisis, alongside UK Government spending decisions, Ms Robison said difficult decisions were required.
The total savings, worth up to £500 million, include:
- Implementing emergency spending controls across the public sector, particularly targeting recruitment, overtime, travel and marketing
- Ending the ScotRail Peak Fares pilot
- Mirroring the UK Government’s policy to means test Winter Fuel Payment
- Making additional savings across portfolios, including in sustainable and active travel and in health and social care
The Finance Secretary said she was also currently planning to use up to £460 million of additional ScotWind revenue to address in-year pressures in 2024-25.
Ms Robison said: “This Government has consistently warned of the significance of the financial challenge ahead.
Prolonged Westminster austerity, the economic damage of Brexit, a global pandemic, the war in Ukraine, and the cost of living crisis have all placed enormous and growing pressure on the public finances.
“In the last three years alone cumulative CPI inflation has seen prices increase by 18.9%, diminishing how far money will go for households and governments alike.
“In the face of these challenges, the Scottish Government has stepped in to support people and services where it has been needed most: on social security, health and public services. But we have done so without equivalent action from the UK Government, which has repeatedly failed to properly review the adequacy of funding settlements.
“We cannot ignore the severe financial pressures we face. We will continue to be a fiscally responsible government and balance the budget each year, as we have done every year for 17 years and as we will do again this year. But this will mean we must unfortunately take difficult decisions along the way.”
Responding to today’s statement by Scottish Government Finance Secretary Shona Robison, Poverty Alliance chief executive Peter Kelly said: “People in Scotland believe in justice and compassion. They know that we need a strong social foundation so we can look out for each other and help people build a life beyond the injustice of poverty.
“But we’re now being left with holes in the fabric of Scottish society that will likely make life even harder for people on low incomes who are already being pushed towards debt, hunger, homelessness, and destitution. That is completely unjust, irresponsible and unnecessary.
“We are a rich country, and our collective wealth has grown massively over the decades. Past generations used that wealth to plan and budget for the public good, and MSPs and Ministers must now urgently use their powers over tax and investment to build a better, fairer future for all of us – and especially those in poverty. Economic growth will not fix the holes in society, unless it comes along with increased social investment.
“We are very concerned about the effect of cuts to mental health support and adult social care. We know that people in poverty are more likely to need that support, and data shows a growing risk of poverty for disabled people.
“We are deeply disappointed that plans to expand concessionary bus travel to people in the asylum system have been scrapped, along with a return to peak fares on ScotRail. We all need the freedom to travel, but too many of us simply can’t afford the fares.
“Organisations like the STUC and IPPR Scotland have published concrete plans that show how the Scottish Government can use powers over tax to invest billions of pounds every year in our shared society.
“We can build better budgets that give people the means to build a better future, to create a true wellbeing economy that supports fair work, and a just transition to the net zero future that we urgently need.”
Reacting to the Scottish Government’s Pre-Budget Fiscal Statement, STUC General Secretary Roz Foyer: “With every cut announced by the Scottish Government today, workers and communities across Scotland will be scarred for generations to come.
“For over two years now, we’ve told the Scottish Government they had almost £3.7 billion worth of untapped revenue at their fingertips through increasing tax on the rich. They could have acted. They chose not to. We are in no doubt that brutal Tory austerity has had an undeniable impact on Scotland’s finances. But the Scottish Government must take responsibility for their own cuts. They cannot be allowed to escape scrutiny.
“Public sector workers have faced more than a decade of falling real wages, lagging far behind those in the private sector. Those workers not only have the right to demand above inflation pay rises, but, if our public services are to improve, improvements in pay are non-negotiable.
“All eyes now turn to the Chancellor but it’s a shambles that we’re awaiting some form of salvation, if any is forthcoming, from the UK Government when our government in Holyrood could have done so much more.
“The people of Scotland do not want a Scottish Government that administers cuts while annunciating the droopy mantra of ‘it wizny me’. They want politicians that choose to govern – and that means taxing the rich to invest in the services that we all rely on.”
The Finance Secretary has outlined the savings in a letter to the Finance and Public Administration Committee (FPAC).
Ms Robison also proposed that the next Scottish Budget takes place on the 4th December, subject to the agreement of FPAC and the Scottish Fiscal Commission.
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